Correlation Between Akeso, and Krystal Biotech

Can any of the company-specific risk be diversified away by investing in both Akeso, and Krystal Biotech at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Akeso, and Krystal Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Akeso, Inc and Krystal Biotech, you can compare the effects of market volatilities on Akeso, and Krystal Biotech and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Akeso, with a short position of Krystal Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akeso, and Krystal Biotech.

Diversification Opportunities for Akeso, and Krystal Biotech

0.79

Correlation Coefficient

Akeso,  Krystal Biotech

Poor diversification

The 3 months correlation between Akeso, and Krystal is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Akeso, Inc and Krystal Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krystal Biotech and Akeso, is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Akeso, Inc are associated (or correlated) with Krystal Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krystal Biotech has no effect on the direction of Akeso, i.e., Akeso, and Krystal Biotech go up and down completely randomly.

Pair Corralation between Akeso, and Krystal Biotech

Assuming the 90 days horizon Akeso, Inc is expected to generate 1.28 times more return on investment than Krystal Biotech. However, Akeso, is 1.28 times more volatile than Krystal Biotech. It trades about -0.01 of its potential returns per unit of risk. Krystal Biotech is currently generating about -0.03 per unit of risk. If you would invest  960.00  in Akeso, Inc on November 28, 2024 and sell it today you would lose (60.00) from holding Akeso, Inc or give up 6.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	92.06%
Values	Daily Returns

Akeso, Inc  vs.  Krystal Biotech

Akeso, Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Akeso, Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Akeso, is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Krystal Biotech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Krystal Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Akeso, and Krystal Biotech

The main advantage of trading using opposite Akeso, and Krystal Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akeso, position performs unexpectedly, Krystal Biotech can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Krystal Biotech will offset losses from the drop in Krystal Biotech's long position.

The idea behind Akeso, Inc and Krystal Biotech pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.